The Saudi insurance market continued its strong growth over the first half of 2014 with gross written premium expanding 24 percent compared with the first half of 2013, according to a new Best’s briefing.
The briefing, titled, “Saudi Market Rebounds Following Regulatory Action,” states that independent actuarial reviews imposed by the regulator after a difficult 2013 have had a positive effect on the first two quarters of 2014.
During 2013, the Saudi insurance market underwent extremely challenging conditions contributing to a significant deterioration in operating performance, as highlighted in the A.M. Best Special Report, “Competition, Growth Dampen Saudi Insurers’ 2013 Performance,” which was published in April 2014.
The independent actuarial reviews imposed by the regulator meant that many insurers were required to materially strengthen claims reserves by year-end 2013, resulting in weakened operating performance, and consequentially, a reduction in risk-adjusted capitalization for most market participants.
Following the actuarial review of the medical and motor business segments, the main driver for growth has been price increases in these lines. The market has returned to profitability, producing SAR 169 million ($45.1 million) of market profit in the first half of 2014. However, many insurers still find the market environment challenging, with approximately half of market participants producing underwriting losses in the first half of 2014.
Source: A.M. Best
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